Summary
PayPal Holdings, Inc. (PYPL) announced on June 9, 2023, the issuance and sale of ¥90.0 billion in aggregate principal amount of senior notes. This offering is comprised of three tranches: ¥30.0 billion of 0.813% notes due 2025, ¥23.0 billion of 0.972% notes due 2026, and ¥37.0 billion of 1.240% notes due 2028. These notes are unsecured senior obligations of the company and rank equally with existing and future unsecured and unsubordinated indebtedness. The proceeds from this offering will likely be used for general corporate purposes. The issuance of these notes expands PayPal's debt capital and provides additional financial flexibility. Investors should note that while the notes are senior obligations, they are structurally subordinated to the liabilities of PayPal's subsidiaries and effectively subordinated to any secured indebtedness.
Key Highlights
- 1PayPal issued ¥90.0 billion in aggregate principal amount of senior notes across three maturity dates: 2025, 2026, and 2028.
- 2The notes carry coupon rates ranging from 0.813% to 1.240%, reflecting current market interest rates for the respective tenors.
- 3The issuance was conducted under PayPal's existing Form S-3 shelf registration statement.
- 4The notes are unsecured senior obligations of PayPal, ranking pari passu with other existing and future unsecured, unsubordinated debt.
- 5The notes are structurally subordinated to subsidiary liabilities and effectively subordinated to secured debt.
- 6Covenants in the indenture include restrictions on liens, subsidiary indebtedness, sale-leaseback transactions, and fundamental corporate changes (mergers, asset sales).
- 7A change of control event coupled with a below investment grade rating downgrade by major credit agencies would trigger a repurchase offer at 101% of the principal amount.